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Preparing to buy an investment property

Bankrate.com offers a few tips for homeowners who think they are ready to become a real estate investor.

Determine goals

There are people who want to be a landlord and dote over their own property's day-to-day care and management. Others want to purchase the property and let someone else handle the management. Still others may be interested in fixing up run-down properties and re-selling them, or starting from scratch, buying undeveloped land and building something on it. Bankrate.com reports the first-time investor may want to stick with residential investment.

Don't be short on funds

Homebuyers may want to speak to a financial advisor to see if they actually have the capital needed to invest. Homebuyers also might need substantial cash reserves to cover periods of time when they won't have tenants or the market is slow, according to Bankrate.com.

Look for an experienced real estate agent

Bankrate.com reports a homebuyer considering property investment should partner with a real estate agent who knows the local investment climate and can find a property that will bear substantial returns over time. Additionally, the investor should plan to keep a strong relationship with that real estate agent, since they could help them re-sell the property and find a new investment opportunity in the future.